Neighbor Disputes Turn Wealthy Areas Into War Zones

Tiffs between luxury homeowners can escalate into bruising legal, financial and emotional combat; HOAs often get involved.

The battle between homeowner Marshall Jenney and the Seabreeze Homeowners Association in Rehoboth Beach, Del., began innocently enough: Some of Mr. Jenney’s bushes and trees had grown too high.

After years of litigation, a contempt order, tens of thousands of dollars in legal fees, and a judge’s admonishment that the entire case had been “a colossal waste of resources,” Mr. Jenney finally cut his foliage.

The upscale resort area, however, will never be the same. In addition to draining the homeowners association’s general fund of about $30,000, it set neighbor against neighbor as the community argued over spending money on the litigation, said Jeffrey Stickle, 65, who said his views were blocked by Mr. Jenney’s trees.

Mr. Jenney characterized the saga as “an emotional ordeal” as well as “a cautionary tale for homeowners that choose to participate in a community with an HOA without strict governance over its litigation pursuits.”

It’s the all-too-common hazard that buyers of multimillion-dollar homes often overlook: Disagreements between homeowners can turn even the nicest neighborhoods into war zones. These disputes can happen anywhere, but in wealthy communities, the tendency to lawyer up quickly can ignite small sparks into all-consuming conflagrations. Collateral damage to neighbors can include legal costs, a soured neighborhood feeling and more difficulty in selling homes.

Homeowners associations often become embroiled in these disputes. HOAs—corporations typically founded by real-estate developers then governed by an elected, volunteer board—collect fees from homeowners for the maintenance of common areas and enforce community rules. HOAs, and condo and co-op boards covered 21% of all housing units—accounting for 68 million people in the U.S. last year, according to the Community Associations Institute, a trade group in Falls Church, Va.

In Rancho Bel Air, Las Vegas, a banner runs the length of Jonathan Friedrich’s roughly 4,000-square foot house. It reads: “Rancho Bel Air sanctioned $10,000 for ‘sandbagging’ me.” The banner refers to penalties a district court ordered the HOA to pay Mr. Friedrich for delays in the discovery process during a long legal dispute.

Mr. Friedrich, a 70-year-old retired general contractor, paid $350,000 for his house in 2003 and spent another $350,000 renovating and decorating, he said. He has fought with the HOA over myriad issues, including whether his home is overseen by the HOA at all.

Mr. Friedrich said that in 2012, while digging through documents at the county recorder’s office, he found the original covenants governing his development and learned that his and some of his neighbors’ houses were not included in the HOA when the community was established. He stopped sending in his HOA fees and, in 2014, filed a lawsuit to recoup what he’d paid. The case will go before a jury in January.

James Pengilly, attorney for the HOA, said the case hinges on “a clerical error made a long time ago,” and not any deliberate misrepresentation.

Gerald Northfield, whose company Performance Cam manages the HOA and is a co-defendant in the case, said “our argument is that he received the benefits as part of the HOA and therefore he was part of the HOA,” and should rightly pay his $205 monthly fees.

Bethany Stone, 44, who lives in the community and recently joined the HOA board, said that Mr. Friedrich’s banner and complaints about the HOA make neighbors avoid eye contact with him.

Mr. Friedrich, who runs a website that aims to expose corruption in HOAs around the country, is part of a community of activists who believe that HOAs hand too much power to volunteer board members and jeopardize property rights.

In Delaware, Mr. Jenney’s trouble with his HOA began when his foliage, including fast-growing Leyland cypress trees, contravened the rules of the HOA, which state that landscaping must not block neighbors’ bay views or exceed a height of 5 feet, said David Weidman, attorney for the Seabreeze HOA.

Mr. Jenney inherited one of his houses, a 3,500-square-foot bay front residence, in 2003, and purchased a smaller house behind it for $700,000. Oceanfront homes in Seabreeze currently start at $1 million, said Brian McMahon, an agent for Rehoboth Bay Realty.

“I didn’t have much of a view, but what I did have was totally eliminated,” said his neighbor Mr. Stickle, who works in publishing. After complaining to no avail in person and by letter to Mr. Jenney, Mr. Stickle turned to the HOA, which also tried to convince Mr. Jenney to cut the foliage before filing suit in 2011.

Mr. Jenney’s attorney, Richard Abbott, said “similar lots had trees and vegetation in violation, but were not sued by the Association.”

The case came to its operatic denouement in May of last year when the judge, a court reporter, Mr. Jenney, his wife, his mother, Mr. Abbott, Mr. Weidman, a handful of board members and a tree expert walked Mr. Jenney’s property, measuring trees and bushes.

In late June, the War of the Shrubbery came to an end. Mr. Jenney’s trees—many over 20 feet high—were either trimmed to 5 feet or “limbed” so that branches lower than 15 feet were pruned.

Some neighbors battle mano-a-mano, with no HOA in the midst. Such was the case in Glenview, Ky., a wealthy suburb of Louisville, where a fracas erupted among three neighbors in a tiny enclave of multimillion-dollar estates that shared the same driveway.

Trouble started last year, not long after each of the homes changed hands. David Fenley, 48, a commercial real-estate developer purchased Breeze Hill, an 8,000-square-foot colonial revival manor house on 12 acres, for $2.6 million.

Stephen Farber, 47, the new chief financial officer of Kindred Healthcare, a publicly traded company based in Louisville, and his wife bought the 9,000-square-foot house next door for $1.7 million and began renovating. Jim Haynes, 64, a luxury car dealer, and his wife bought the third house last year for $710,000.

In 2015, Mr. Fenley proposed to his neighbors that they release him from easements allowing them to use part of his driveway. Instead, he would keep that driveway for himself, and build another they could use.

The neighbors began discussing how the driveway changes would work, but fairly quickly, relationships broke down, according to court documents. Mr. Fenley put cones along the shared driveway that made it harder for his neighbors to access their homes; he said in court documents that he was limiting his neighbors to the parts of the driveway that they legally had access to. As animosity grew, Mr. Fenley and the Farbers both hired private security guards. In September, fearing that Mr. Fenley might unilaterally go ahead with his driveway plan, the Hayneses and the Farbers filed an injunction.

The Farbers sold the home in December for $2.15 million. The buyer? Kindred Healthcare, Mr. Farber’s employer, which stated in an April proxy statement this year that the rationale for buying the home was the “personal safety” of the CFO and his family. The company also gave Mr. Farber $250,000 for relocation costs, according to the statement. The family moved about a 15-minute drive away, according to public records.

The fight isn’t over. Mr. Fenley has filed suit against the Farbers and Kindred, alleging that both had slandered him by implying that he put the Farbers in danger, which in court documents he says is “false.” Mr. Fenley, the Farbers, Kindred Healthcare and their attorneys declined to comment. In court documents, Kindred stated that because of the notoriety of the shared driveway fight, it has to build a separate driveway to the house in order to sell the home. That drive is currently under construction.

Mr. Haynes, who today still uses the original driveway to get to his house, said he found the conflict “embarrassing, expensive and upsetting” enough to consider selling and moving. However, he and his wife have decided to stay, renovate, and make every effort to live happily with their neighbors.